Capitaland (technical)

Capitaland: UOB Kay Hian note that CapitaLand has always been one of house top picks. Its residential property sales in China are picking up and selling prices have risen 4-5%. Its project in Chongqing is the single biggest investment in China by any Singapore developer to-date and it is progressing as planned. In Singapore, CapitaLand will be redeveloping Somerset Grand Cairnhill and expect a net profit contribution when it is sold back to Ascott Residence Trust in 2017. Gearing is comfortable at 0.41x with cash of S$5.1b as at 2Q12, which provides an opening for more acquisition opportunities. Finally, view the appointment of Mr Lim Ming Yan as the new CEO favourably. His immense experience in China will strengthen CapitaLand’s positioning in China’s property market. Maintain BUY and target price of $3.70, pegged at a 15% discount to our RNAV/share. Technically, the stock could be trending higher towards $3.48 should it be well supported above S$3.11 and above its key support level at $2.97.